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Collaborative Innovation Between Shopping Centres and Retailers

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The primary focus of the roundtable discussion was to discuss the future of retail real estate as an asset class and to find the right mix, spreading risk, and building profitability, creating integrated retail spaces to capture 24*7 consumer activities and needs in the current situation.

In an attempt to announce the return of normalcy to the real estate and retail sectors, IMAGES Group in association with Shopping Centres Association of India (SCAI), organised a roundtable titled ‘Collaborative Innovation Between Malls and Retailers’, at the inaugural session of ‘Shopping Centre Next 2021’. The session was conducted on September 2, 2021, at Grand Hyatt, Goa, which witnessed a gathering of experts from the shopping centre and retail industry.  The event was conducted keeping all the COVID guidelines mentioned by the Central and the State governments, giving importance to social distancing and hygiene.

The primary focus of the roundtable discussion was to discuss the future of retail real estate as an asset class and to find the right mix, spreading risk, and building profitability, creating integrated retail spaces to capture 24*7 consumer activities and needs in the current situation.

The experts discussed the changes in business needs, experiences, drivers and profitability models of post-2021 shopping centres in India. The primary focus was on the collaborative innovation between tenants and developers, which is predicted as a win-win game in these challenging times. The panel also discussed the lessons learnt from the challenges of 2020-21 to build mutual resilience and growth for the future.

Moderated by Rajendra Kalkar, President West/Whole-Time Director, Phoenix Mills and Vineet Gautam, CEO, Bestseller India; the session witnessed a discussion between the retailers and mall developers, on the challenges related to post- COVID scenario. Few speakers joined the session via video call as well.

The other speakers in the panel included:

Abhinav C Ajmera, President- Leasing, Omaxe
Ashish Gupta, AVP- Leasing, Elan Group
Dr. Dheeraj Dogra, Chief Leasing Officer, Spaze Towers
JP Biswas, Leasing Consultant, KW Group
Jayen Naik, Senior VP- Operations & Projects, Nexus Malls
Nandini Taneja, VP Leasing, Reach Developers
Akash Srivastava, AVP- Business Development, Jubiliant Foodworks ( R)
Arif Raza, AVP, Retail Business Development, Vedant Fashions
Manish Chandra, BD Head, Skechers
NP Singh, Director-BD, Samsonite South Asia
Nikhil Jatinder, Head- Business Development, Nike ( RJ Corp)
Nagendra Rathod Sr. V.P Sales & Marketing – Sheetal Infrastructure
Ravinder Choudhary, BD Head, Vegas Mall
Rohit Gopalani, National Head- Leasing, Inorbit Malls
Shriram PM Monga, Director, Arklan
Zubin Jall, Executive Director, Real Estate-World trade Center- Nagpur
Preeti Chopra, National Head- BD- Retail Raymond
RA Shah, Advisor_ Property, Trent
Vivek Shrivastava, BD Head, Benetton
Sumit S Suneja, Head BD & Franchise, Bestseller

Virtual  presence
Abbas Jabalpurwala, CEO, Timezone Entertainment
Arijit Chatterjee, COO, Junction Mall
Deepak Zutshi, VP- Leasing, Select CITYWALK
Anurag Katriar, Executive Director & CEO, deGustibus Hospitality
Rahul Singh, Founder & CEO, The Beer Café

Rajendra Kalkar kickstarted the session by welcoming the speakers and introducing the topic for discussion. “Given that disruption has become part of life these days, we must make our lives more predictable by working together to survive and make things easier for both of us. We need money to keep the business running and therefore we must be engaged, support each other to increase each other’s revenue, topline and bottom line,” said Kalkar.

Vineet Gautam, CEO, Bestseller India added further, “The collaboration word which we were mentioning for so many years, we saw it becoming a reality during the pandemic time. Whether it is about reopening of malls, or stores during the first lockdown was much tougher for all of us and therefore, we saw so much collaboration happening. At the end of day, be it a retailer or mall developer, we know that we can’t survive without selling and we have made strategies accordingly.  We have definitely collaborated a lot and have taken new learnings from this situation in the long run.”

Collaboration and Learnings

“We got to know the retailers in a much better way. We negotiated with them on different areas of concerns and situations and came out with solutions which worked for both of us. The sense of partnership developed, and became more stable, after the second lockdown. As a result, malls are actively discussing their marketing programs with the retailers and similarly the brands are also discussing their plans with the mall developers to increase the footfalls in the mall,” says Jayen Naik, Senior VP- Operations & Projects, Nexus Malls.

Arif Raza, AVP, Retail Business Development, Vedant Fashions explained from the retailers’ perspective, “Manyavar is not a discount friendly brand and therefore we had to face a different set of challenges in the last one and half year. A huge portion of our sale is linked with the marriages and during this period, marriages were not happening.  For people who were getting married, the ceremony was limited to a fixed number of visitors and with a cut down budget. When we talked to malls, it was always about discounting and promotion where we cannot participate. For a retailer like us, malls should have worked on some other preposition, which should benefit us as well.”

“Speaking about re-negotiation, it is a temporary thing for us. Whenever we are in talks with shopping centres for leasing space, we always miss the point that Manyavar is a heavy high street kind of brand and there is a never-ending silent competition going on between malls and high streets. None of the malls have paid full attention to the factor and this time it has come out openly that streets have performed better. Therefore, malls should come up with a strategy, wherein they can bring in brands which are very prominent in high streets, so that the competition can also be taken care of,” he added further.

Nikhil Jatinder, Head- Business Development, Nike (RJ Corp) explains, “Post two waves, we have been upsizing our stores and we looked towards the mall developers for the support. We got support from them but as we know and totally understand that everyone has limitations be it in terms of funds and we are hoping that period is over now. COVID has taught us a lot and these changes and norms are going to help us in the long run.”

Rahul Singh, Founder & CEO, The Beer Café added further, “Competition makes us fast, as we all are competing with some one or the other, be it retailer/brands or malls. Retailers and brands compete with other brands in their category and same is the situation for mall developers where they are competing with the other malls.  Despite this, it is collaboration that will make us better.”

High Street vs Malls: Weightage & Comparison

Shopping malls vs high street retail is an indefinite infinite discussion. In the last fifteen months, malls were closed for a maximum period, and therefore high streets have benefited a lot from this situation. Commenting on the situation, Akash Srivastava, AVP- Business Development, Jubiliant Foodworks says, “For us, in our entire brand journey period, the mall portfolio has been 15-20 per cent, as we have been a more high-street kind of format. When COVID happened, fortunately we were prepared, from the experiences of the international markets in the USA and China. Malls were supportive as they waived off the rental and gave discounts as well, and they gave discounts and other waive off and were supportive in marketing and promoting strategies.”

“Malls have been good for us, but as this situation is going to last long, malls too need to revamp themselves from different retailers. They need to have a cohesive bonding with F&B retailers and provide them with delivery counters at the ground floor, and not at the food court.  Currently, we need to realise the importance of food, and malls need to up their food percentage of food in their premises,” he added further.

Deepak Zutshi, VP- Leasing, Select CITYWALK says, “We all are sailing in the same boat, be it retailer or the mall developers and we need to sail in one direction together. Every customer who visits us, doesn’t particularly come for the mall, in maximum case, he comes for the brand be it fashion, food or entertainment. So, collaboration is very important, and the most critical part is the database. We do not have a direct database of any customer, the only database we have is about the complaints and mis-happenings. The real customer database remains with the retailers. Retailers can jointly work with the mall to address that database that is going to help us a lot in the long run.”

New Strategies in the Pipeline

Talking about the new challenges and the solution to counter them, NP Singh, Director-BD, Samsonite South Asia, emphasised on the operational and existence part. “Almost every retailer got support from the malls during the first wave, we do feel that we got some support to go ahead. However, the operational part is one area which needs some attention. Different categories will be facing different levels of achievements. We must look at a particular brand/ category to the extent of the business happening post-COVID and charge him accordingly. There are certain categories that have still not recovered fully and should be charged according to the performance. It is a matter of co-existence. Malls and retailers must co-exist, and this should be a factor in determining the next step.”

Dheeraj Dogra, Chief Leasing Officer, Spaze Towers highlighted the customer service and interaction part to bring back more consumers and revenue. “E-commerce is a huge threat to both malls and retailers, due to their service and consumer engagement policy. Retailers and malls should also adapt similar strategies. Customer service and interaction will help us bring back customers. E-commerce has the edge because of their format of one -to one interaction,” said Dogra.

Manish Chandra, BD Head, Skechers talked about the need of re-strategising the business model. “In the current situation, we need to go back to the basics and re-strategise the model. Until last year, technology has become a necessity, being a tech savvy brand or Omnichannel today is the most essential thing for everyone. We reached out to our consumers across various platforms including WhatsApp and as a result, we did Rs. 22 crores of business only on WhatsApp. Today it is very important to reach out to the consumers across every possible platform, both online and offline. We were not worried about the loss of the sale, but we were worried about the loss of the consumers. The consumer today wants you to knock on his door and therefore we must reach to them,” said Chandra.

“In terms of the collaboration, I would like to mention that every mall has an operation team, and it is more into highlighting the maintenance and technical malfunction. They should also understand the visual merchandising, product, well versed and should be worried about whether a particular brand is having the right assortment or not,” he added further.

Vivek Shrivastava, BD Head, Benetton agreed and said, “Everything today is about consumers actually and it is time to address the consumer as one asset for both retailers and malls. Data is something which is very precious to every brand. Yes, there is a way through technology, and we will be able to share either with the customer ideology, thought perspective. We need to find a collaborative solution from both retailers and malls perspective.”

Anurag Katriar, Executive Director & CEO, deGustibus Hospitality highlighted a few key points to make this collaboration standpoint working.  “Today, it is completely wrong to compare pre-COVID times to the post-COVID times. Any terms of engagement which were relevant in the pre-COVID era cannot be relevant now. Secondly, the relationship between malls and retailers needs to re-define from a mindset perspective and not a commercial perspective. The bonding should be like a performer and a stage, where malls should act like a stage who needs performers to keep the stage occupied, whereas the retailers are the artist, who needs the stage to perform. That is the kind of mindset we need to have going forward, not the landlord- tenant mindset. This is a new post COVID world, where the consumption is going to be little mutated, we must make sure what are the new revenue potential and how to keep them afloat.  This is the time to redefine strategy and approach.”

“Going from the experience in the pandemic, redefining the retail and tenant mix can be another prospect. We have seen that major anchor tenants, mainly in the form of fashion and luxury things, are having problems surviving. Therefore, mall developers should look for a healthy mix in coming months,” says Nagendra Rathod, Sr. V.P.-Sales & Marketing – Sheetal Infrastructure.

Social Media: A Common Platform

Consumers today are buying from the brands but the choice buying format is not fixed. He can buy it either from the shopping mall, high street or online. The buyer is not at all dependent solely on any format. Social media is one such platform which has been turnout to be one of the most preferable choices of reaching out to consumers in large numbers.

“Malls should start thinking of themselves as the central point of purchase, where they can accommodate all the brands and then they should start behaving more like a retailer than a landlord. Only from here, the question how social media can become relevant. Unless there is a change in approach, new platforms will emerge but won’t be effective in the long run,” says JP Biswas, Leasing Consultant, KW Group.

“Innovation is the need of the hour, but the priority should be how much impact it is making to the business. Making it more convenient and consumer friendly should be the objective,” added Akash Srivastava.

Creating Uniform Merchandising

So far for most brands, there are separate merchandise for their offline and online stores. When asked, is this trend going to continue or is there a need for uniform merchandise? Sumit S Suneja, Head BD & Franchise, Bestseller India explained, “Everything is merging towards uniformity. We are totally moving towards becoming an omnichannel service company, rather than only offline or online. During this pandemic, we strengthened our business to a large extent. Our merchandise and stocks available on both online and offline will be similar, obviously at some point there will be some difference in the merchandise, depending on which city and channel you are in.”

“We have similar products online as well as in the store and we supply from the store as well. Basically, we have increased the speed of the deliveries, but what we have done in this pandemic is not to lose the margin. We have a maximum percentage of fresh merchandise, and we believe in the consumer convenience. During the first lockdown also, we believed in opening new stores and negotiation was the secondary part. Everybody’s requirements are different and we have acted accordingly so far,” concludes RA Shah, Advisor-Property, Trent.